Highest bidder on Homesearch.com auction, what now?

[Kathy Lu]

I was the highest (not winning) bidder on an online auction. Homesearch.com called the next day and said that my bid was "waay off the reserve price", so it must be forwarded to the bank for review. The representative wanted to know if this was my "final and best" offer. I said that I'll let them know tomorrow, after talking with my realtor and possibly an attorney. She said ok.

The auction did seem a bit suspicious to me...it seemed like I was the only bidder (besides what seemed like straw bids from the auction house). Also, as the time between my bids became longer (I was reaching my pre-determined limit), the bid increment dropped from $7500 to $2500. Seemed like they were trying to get me to press that button one more time!

Anyway, I'd like some opinions about what to do. Should I stand on my original price? Should I offer a few thousand more? It's a potentially very nice home, but needs a lot of work. If I give them much more, there is not a lot of room for profit on a flip.

Has anyone stood on their original bid and had it accepted? Thanks.

[Shaun Reilly]

In another thread recently someone pointed out that on most of these auction sites (and I think HomeSearch was one the called out specifically) if you read all the terms they do basically say they reserve the right to put in BS bids on their properties to drive up the price.  So that very well could be what was happening to you.

Regardless of that issue... As far as paying more than your bid, that is up to you based on what you think it is worth.  Sounds like you can't go up much and still make the profit you want.  That sounds like the answer is stick with the original or go up a small amount that is still in the range you wanted to be in.

In my past experience I have had this situation always happen where I have no met the reserve but have been the high bidder. I have had them just give it to me since they wanted to be rid of it. I have had them come back and say they needed more and since it was a good deal I did go up a little but still within my MAO. I have also had some come back and said I didn't meet the minimum and give me a price they are willing to sell for and I declined as it was way more than I ever would have considered bidding.

All that is just to say that there is noway to really know what they will do.  You might say "No my bid was my highest and best" and they give it to you or you might go up past where you should and they still might not feel it is enough.  

Good luck but my advice is no deal is better than a crappy one, so don't overpay.